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CHAPTER 1 TITLE OF THE PROJECT: Study of Performance Appraisal System and Its Effectiveness in an Organization INTRODUCTION The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things

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Page 1: Schneider


Study of Performance Appraisal System and ItsEffectiveness in an Organization


The history of performance appraisal is quite brief.

Its roots in the early 20th century can be traced to Taylor's pioneering Time

and Motion studies. But this is not very helpful, for the same may be said

about almost everything in the field of modern human resources management.

As a distinct and formal management procedure used in the evaluation of work

performance, appraisal really dates from the time of the Second World War -

not more than 60 years ago.

Yet in a broader sense, the practice of appraisal is a very ancient art. In the

scale of things historical, it might well lay claim to being the world's second

oldest profession!

There is, says Dulewicz (1989), "... a basic human tendency to make judgments

about those one is working with, as well as about oneself." Appraisal, it seems,

is both inevitable and universal. In the absence of a carefully structured system

of appraisal, people will tend to judge the work performance of others,

including subordinates, naturally, informally and arbitrarily.

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The human inclination to judge can create serious motivational, ethical and

legal problems in the workplace. Without a structured appraisal system, there

is little chance of ensuring that the judgments made will be lawful, fair,

defensible and accurate.

Performance appraisal systems began as simple methods of income

justification. That is, appraisal was used to decide whether or not the salary or

wage of an individual employee was justified.

The process was firmly linked to material outcomes. If an employee's

performance was found to be less than ideal, a cut in pay would follow. On the

other hand, if their performance was better than the supervisor expected, a pay

rise was in order.

Little consideration, if any, was given to the developmental possibilities of

appraisal. If was felt that a cut in pay, or a rise, should provide the only

required impetus for an employee to either improve or continue to perform


Sometimes this basic system succeeded in getting the results that were

intended; but more often than not, it failed.

For example, early motivational researchers were aware that different people

with roughly equal work abilities could be paid the same amount of money

and yet have quite different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were

important, yes; but they were not the only element that had an impact on

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employee performance. It was found that other issues, such as morale and self-

esteem, could also have a major influence.

As a result, the traditional emphasis on reward outcomes was progressively

rejected. In the 1950s in the United States, the potential usefulness of appraisal

as tool for motivation and development was gradually recognized. The general

model of performance appraisal, as it is known today, began from that time.

Modern Appraisal

Performance appraisal may be defined as a structured formal interaction

between a subordinate and supervisor, that usually takes the form of a periodic

interview (annual or in which the work performance of the subordinate is

examined and discussed, with a view to identifying weaknesses and strengths

as well as opportunities for improvement and skills development.

In many organizations -but not all -appraisal results are used, either directly or

indirectly, to help determine reward outcomes. That is, the appraisal results are

used to identify the better performing employees who should get the majority

of available merit pay increases, bonuses and promotions.

By the same token, appraisal results are used to identify the poorer performers

who may require some form of counseling, or in extreme cases, demotion,

dismissal or decreases in pay. (Organizations need to be aware of laws in their

country that might restrict their capacity to dismiss employees or decrease


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Whether this is an appropriate use of performance appraisal -the assignment

and justification of rewards and penalties -is a very uncertain and contentious


Controversy, Controversy

Few issues in management stir up more controversy than performance


There are many reputable sources -researchers, management commentators,

and psychometricians -who have expressed doubts about the validity and

reliability of the performance appraisal process. Some have even suggested

that the process is so inherently flawed that it may be impossible to perfect it

(see Derven, 1990, for example). At the other extreme, there are many strong

advocates of performance appraisal. Some view it as potentially "... the most

crucial aspect of organizational life" (Lawrie, 1990).

Between these two extremes lie various schools of belief. While all endorse

the use of performance appraisal, there are many different opinions on how

and when to apply it,

There are those, for instance, who believe that performance appraisal has

many important employee development uses, but scorn any attempt to link the

process to reward outcomes -such as pay rises and promotions. This group

believes that the linkage to reward outcomes reduces or eliminates the

developmental value of appraisals. Rather than an opportunity for

constructive review and encouragement, the reward- linked process is

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perceived as judgmental, punitive and harrowing. For example, how many

people would gladly admit their work problems if, at the same time, they

knew that their next pay rise or a much-wanted promotion was riding on an

appraisal result? Very likely, in that situation, many people would deny or

downplay their weaknesses.

Nor is the desire to distort or deny the truth confined to the person being

appraised. Many appraisers feel uncomfortable with the combined role of

judge and executioner.

Such reluctance is not difficult to understand. Appraisers often know their

appraises well, and are typically in a direct subordinate-supervisor

relationship. They work together on a daily basis and may, at times, mix

socially. Suggesting that a subordinate needs to brush up on certain work

skills is one thing; giving an appraisal result that has the direct effect of

negating a promotion is another.

The result can be resentment and serious morale damage, leading to

workplace disruption, soured relationships and productivity declines.

On the other hand, there is a strong rival argument which claims that

performance appraisal must unequivocally be linked to reward outcomes. The

advocates of this approach say that organizations must have a process by

which rewards -which are not an unlimited resource -may be openly and fairly

distributed to those most deserving on the basis of merit, effort and results.

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There is a critical need for remunerative justice in organizations. Performance

appraisal -whatever its practical flaws -is the only process available to help

achieve fair, decent and consistent reward outcomes. It has also been claimed

that appraises themselves are inclined to believe that appraisal results should

be linked directly to reward outcomes -and are suspicious and disappointed

when told this is not the case. Rather than feeling relieved; appraises may

suspect that they are not being told the whole truth, or that the appraisal

process is a sham and waste of time.

The Link to Rewards

Recent research (Bannister & Balkin, 1990) has reported that appraises seem

to have greater acceptance of the appraisal process, and feel more satisfied

with it, when the process is directly linked to rewards. Such findings are a

serious challenge to those who feel that appraisal results and reward outcomes

must be strictly isolated from each other. There is also a group who argues that

the evaluation of employees for reward purposes, and frank communication

with them about their performance, are part of the basic responsibilities of

management. The practice of not discussing reward issues while appraising

performance is, say critics, based on inconsistent and muddled ideas of


In many organizations, this inconsistency is aggravated by the practice of

having separate wage and salary reviews, in which merit rises and bonuses are

decided arbitrarily, and often secretly, by supervisors and managers.

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There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocation. Decision as to who gets

salary increase, promotion, and other rewards are determined by their

performance evaluation. Second, these appraisals can be used for identifying

areas where development efforts are needed. The performance appraisal is a

major tool for identifying deficiencies in individuals. Finally it can be used as

a criterion against which selection devices and development programs are

validated. As a key input into management's reward and punishment decision,

performance appraisals can motivate or de-motivate employees.

Three different approaches exist for doing appraisals. Employees can be

appraised against

1. Absolute standards

2. Relative standards

3. Objectives

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Since organizations exits to achieve goals, the degree of success that individual

employees have in reaching their individual goals is important in determining

organization effectiveness.

Performance system is fundamentally, a feed back process, which require

sustained commitment. The cost of failure to provide such feedback may result

in a loss of key professional employees, the continued poor performance of

employees who are not meeting performance standards and a loss of

commitment by employees, in sum, the myth that the employee know what.

they are doing without adequate feedback from management can be an

expensive fantasy.


1. Establishing Performance Standard

2. Communicate Performance expectations to employees

3. Measure actual performance

4. Compare actual performance with standards

5. Discussion with the employees and identification development programs

to bridge the gap.

6. Initiate action

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In general the appraisal systems serve a two fold purpose

1. To improve the work performance of employees by helping them realize

and use their full potential in carrying out their firm’s mission.

2. To provide information to employees and managers for use in making,

work related decisions.

More specifically appraisals serve the following purposes.

a) Appraisals provide feedback to employees and help the. "' management

identify the areas where development efforts are "' needed to bridge the

gaps thereby serving as vehicles for personal “and career development.

b) It helps management spot individuals who have specific skills so that

their promotions/transfer are in line with organizational requirements.

c) Appraisal serve as a key input for administering a formal organization

reward and punishment system.

d) The performance system can be used as a criterion against which

selection devices and development programs are validated.

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Reliability: The foremost requirement of a sound system is reliability. In this

contact it refers to consistency of judgment. For any given employee,

appraisals made by raters working independently of one another should agree

closely. But raters with different perspective (e.g. supervisors, peers,

subordinates) may see the same individuals job performance very differently.

To provide reliable data, each rater must have an adequate opportunity to

observe what the employee has done and the condition under which he or she

has done it. By making appraisal system relevant, sensitive and reliable we

assume the resulting judgment are valid as well.

Acceptability: In practice, acceptability is the most important requirement of

all, for it is true that human resources program must have the support of.

those who will use them. Unfortunately, many organizations do not put much

effort into garnering the front end support and participation of those who will

use the appraisal system. Ultimately it is management's responsibility to

define as clearly as possible the type and level of job behaviour desired of


It is important to enlist the active support and cooperation of subordinates by

making explicit what aspects of job performance they will be evaluated on.

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Practicality: This implies that appraisal instruments are easy for managers

and employees to understand and to use.

For years, personnel specialists have searched for the 'Perfect; appraisal

method as if it were some kind of miraculous cure for many pitfalls that

plague organizations. Such a method does not exist. In tomorrow’s world of

work far more emphasis needs to be placed on process issues. Factors such as

timing and frequency are no less important. In sum performance appraisal is

a dialogue involving people and data. Both technical and human issues are

involved. Neither can be overemphasized at the expense of the other.


The most fundamental requirement for any rater is that he or she has an.

adequate opportunity to observe the rates job performance over a reasonable

period of time. This suggests several possible raters.

The immediate supervisor: Generally appraisal is done by this person. He

is probably the most familiar with the individual's performance and in most

jobs has had the best opportunity to observe actual job performance. Further

more, the immediate supervisor is probably best able to relate the individual's

performing to department and organizational objectives.

In some jobs such as outside sales, law enforcement and teaching, the

immediate supervisor may observe a subordinate's actual job perfoformance

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(and indirectly thru written reports). Here judgment of peers play important

role. However, there is a danger of potential bias.

Subordinates: Appraisal by subordinates can be useful input to the

immediate development. Subordinates know first hand the extent to which the

supervisor actually delegates, how well he communicates, the type of

leadership he has and the extent to which he or she plans and orgasms.

Self appraisal: On one hand it improves the rate's motivation and moral, on

the other it tends to be more lenient, less variable and biased. The evidence on

the accuracy of self assessment is fairly complex.

In industry it is seen that feed back/ input is taken from various sources -Peers,

subordinates, superiors etc. Some companies have gone step ahead in taking

feedback from the customers and integrating it into the performance

management process.

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The traditional approach: The one dimensional model

The Job Define what results Performance contacthave to e achieved

Define a set of keyObjectives against the accountabilities

Accountabilities i.e,Output

Review performance against the key


In this model job expectations are defined in terms of what results have to be

achieved. This model doesn't have a long term focus and can't be used for

employee development and career path planning,

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A satisfactory performance implies doing a job effectively and efficiently, with

a minimum degree of employee -created disruptions. Employees are

performing well when they are productive. Yet productivity itself implies both

concern for effectiveness and efficiency. Effectiveness refers to goal

accomplishment. Efficiency evaluates the ratio of inputs consumed to outputs

achieved. The greater the output for a given input, the more efficient the

employees. Similarly, if output is a given, consumed to get that output results

in greater efficiency.

There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocations. Decisions as to who gets

salary increases, promotions, and other rewards are determined by their

performance evaluation. Second, these appraisals can be used for identifying

areas where development efforts are needed. Management needs to spot those

individuals who have specific skill or knowledge deficiencies. The

performance appraisal is a major tool for identifying these deficiencies. Finally,

the performance appraisal can be used as a criterion against which selection

Devices and develop programs are valis

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Chapter 2



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Chapter 2


1. Objective of the study

This project aims at studying the system of performance appraisal and its

effectiveness in an organization. Performance appraisal is the most significant

and indispensable tool for the management as it provide useful information for

decision making in area of promotion and compensation reviews.

Thus broad objectives of the study includes:

To know the present system of performance appraisal

To know the extent of effectiveness of the appraisal system

To identify and know the area for improvement system

2. Sample of the study

The population covered for the present study consisted of employee belonging

to supervisory and the level above. For the purpose of this study, survey

covered the employee of SCHNEIDER ELECTRIC INDIA PVT LTD. falling

under supervisor and the level above.

The study covered a sample of 100 employees belonging to supervisory level

and above.

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3. Methodology of the project

The project work has been carried out in three stages, a structured

questionnaire with objective and question was communicated tested and

finalize. During the second stage, the questionnaire was administered to the

employees at Schneider Electric India Pvt Ltd. by contacting them. The work

relating to data entry compilation, data analysis and report writing constituted

the third stage. Interview index was also used at some places to get

information on the project subject.

The details of the methodology adopted are presented below:

The Questionnaire

Keeping in view the objective of the study, questionnaire was designed and

tested on few employees. After getting the proper response and sanction from

the concerned department the questionnaire was finalized.

Response to Questionnaire

In all 00questionnaire were given to employees falling in the category of

supervisors and above. Out of which 00 could be collected back duly

completed. The researcher individually contacted the employees to get

response on the questionnaire.

Data entry and analysis

It has been an uphill task to enter the enormous data received through the

questionnaire which consisted nearly 20 questions. Response to the descriptive

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questions though very few but was valuable for the purpose of study. Hence

these were further structured in time with the system adopted for compilation

and data analysis.


Many employees gave guarded answers to some crucial questions.

Some of them did not fill the questionnaire due to lack of time

Response could not be collected from the total sample selected.

Some of the questionnaire could not be completed due to reasons other

than time factor.

The confidentiality of the system created some problem in getting


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Chapter 3


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Schneider Electric India Pvt. Ltd (SEI) is a 100% subsidiary of Schneider Electric Industries SAS, a global specialist in energy management. With a strong force of over 5,000 employees, the company is well known for its unique vision, progressive management and above all, its exemplary Quality.

Schneider Electric entered India in 1963 through a first joint venture with Tata group.

In 1995 Schneider Electric established a 100% fully owned subsidiary Schneider Electric India Pvt. Ltd.

In the year 2000 Schneider Electric further consolidated its position in the Indian market by acquiring S&S Switchgear and Crompton Greaves LV division.

Year 2007 saw Critical Power & Cooling Solutions major APC – MGE ‘s acquisition by Schneider Electric

1935 A.J. "Al" Schneider used the proceeds from the sale of the family car to buy his first truck.

1938 Bought Bins Transfer &Storage, incorporated the company (June 6) and changed the name to Schneider Transport & Storage. Moved offices to a building once used as a stable.

1944 Schneider discontinued storing household goods, although "Storage" wasn't dropped from the name until the 1960s.

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1958 Schneider was granted its first interstate authority by the ICC. The first shipment was for Procter & Gamble (P&G) from its plant in Green Bay, Wis., to another P&G facility in Cheboygan, Mich.

1961 Don Schneider, Al's oldest son, joined the company as manager, bringing the office staff to five.

1962 Schneider Transport logo adopted.

1964 Schneider Transport merged with Packer City Transport.

1968 Garrison Transport merged into Schneider Transport Inc. and was added to Schneider's operating authority.

1969 Purchased Kampo Transit, a 50-truck regional milk and fuel oil hauler.

1970 Milestone grant of authority from the ICC to haul paper and paper products. Paper remains a significant part of the Schneider portfolio.

1971 Purchased Transnational Truck (TNT) of Amarillo, Texas. Departing from previous practice of incorporating all acquisitions into Schneider Transport, TNT remained a separate business unit.

1974 Purchased National Refrigerated Transport (NRT) of Tulsa, Okla.

1975 Installed a state-of-the-art computerized control system. Move was light-years ahead of system employed by the competition. Employed the first field sales representative.

1976 Don Schneider named president of the company.

1976 Teamsters called a "wildcat" strike on Schneider Transport.

1976 Purchased National Bulk Transport and changed the name to Schneider Bulk Carriers. The acquisition expanded the company's portfolio to include national tanker service.

1976 The holding company, Schneider National, Inc., formed.

1977 The first bulk fuel site was installed at the Wise Garage in Dayton, Ohio. Christensen Oil was purchased to provide sufficient fuel of the appropriate quality.

1979 The second OPEC fuel crisis caused gas rationing and fuel shortages. Schneider Transport responded with a national miles-per-gallon campaign through the Schneider Fuel School, teaching 2,000 drivers to drive 55 miles per hour to conserve fuel.

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1980 Congress passed the Motor Carrier Act of 1980, which provided for sweeping deregulation of the trucking industry.

1981 ICC granted Schneider 48-state authority to carry all commodities except explosives and bulk.

1982 To leverage the long-distance network needed for the growing number of drivers, Schneider formed Schneider Communications to provide long-distance telephone service to customers in the Midwest.

1982 Schneider National established its charitable arm, the Schneider National Foundation, to create a positive force for change in the communities where its associates live and work.

1983 Schneider Family Fitness Event initiated in Green Bay, Wis.

1983 Founder Al Schneider died.

1984 Purchased International Transport, Inc. of Rochester, Minn., the largest flatbed and heavy-haul Products Company in the United States.

1985 Schneider National Carriers (SNC) formed by joining all of the separate business units purchased through the 70s and 80s. SNC is non-union, but Schneider Transport remained a union carrier under agreement with the Teamsters.

1986 Schneider became the first carrier to install two-way satellite communication systems in all 6,000 over-the-road trucks. Introduced EDI (Electronic Data Interchange) transactions.

1988 Schneider Moving & Storage sold.

1989 Schneider National Carriers obtained authority to haul in the Canadian provinces of Quebec, Ontario and British Columbia.

1990 Opened Canadian office.

1990 International Transport's name changed to Schneider Specialized Carriers.

1992 Company achieved $1 billion in annual revenue for the first time. Corporate headquarters moved to the Customer Service and Corporate Business Center at 3101 South Packer land Drive in Green Bay, Wis.

1993 Schneider Logistics, Inc. created.

1994 Schneider Logistics awarded the General Motors Service Parts Operation contract. This is the largest logistics industry contract ever awarded.

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1995 Schneider Communications sold to Frontier Communications.

1995 Schneider Dedicated conducted largest-ever private fleet conversion for Kimberly-Clark.

1996 Schneider National surpassed $2 billion in annual revenue.

1997 Opened Mexico office.

1997 Opened office in Venlo, the Netherlands.

1998 Purchased Highway Carrier Corporation, Builders Transport and Land star Poole.

2000 Purchased Tranzact Payment Service.

2002 Christopher Lofgren named president and CEO on August 2, 2002, succeeding Don Schneider.

2004 Schneider National surpassed $3 billion in annual revenue.

2005 Schneider Logistics acquired American Port Services and Powers Transportation Services.

2006 Schneider Logistics opened office in Shanghai, China and began offering supply chain consulting services.

2006 Schneider Logistics acquired American Overseas Air Freight to become the first truckload carrier to offer door-to-door international logistics services.

2006 Schneider Payment Services sold to US Bank.

2006 Schneider Specialized sold to Maverick USA.

2006 Schneider introduced dedicated intermodal service in the Ohio Valley. The new service is a collaboration between Schneider, CSX Intermodal, Inc., the Kansas City Southern railroad and the Marion, Ohio Industrial Center.

2006 Schneider introduced Mexico Express Intermodal service, providing unprecedented access to Mexico's prime industrial center. Innovative rail solution brings greater capacity, expedited customs clearance and enhanced freight security to cross-border shipments.

2007 Schneider National granted authority to operate as a domestic carrier and logistics services provider in the People's Republic of China. Schneider Logistics (Tianjin) Co., Ltd. established under the new authority to provide these services in

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China. License makes Schneider the first North American truckload provider to establish a domestic business in China.

2007 Schneider Logistics acquired the key operating assets of Bayoun Logistics in the People's Republic of China. Bayoun is ranked in the top 100 of all logistics enterprises in China, and is one of the country's top 30 private logistics enterprises. The combined offering now includes transportation, warehousing, cross-docking, third-party logistics and consulting services focused on the domestic Chinese market.

2007 Schneider National earned its second consecutive Environmental Excellence Award from the EPA. The award, earned by Schneider for demonstrating leadership in conserving energy and for lowering greenhouse gas emissions from its transportation and freight activities, is given by the U.S. Environmental Protection Agency Smart Way Transport Partnership. Of Smart Way’s 600-plus partners, Schneider was one of just 34 companies to receive this distinction.

2007 Schneider National Foundation reached charitable milestone, donating $1 million in cash, equipment, in-kind transportation services and other contributions internationally.

2008 Schneider rolled out Western Regional service to meet growing customer demand for short-haul service. Seven-state service area includes Arizona, California, Colorado, Nevada, Oregon, Utah and Washington.

2008 Schneider National Bulk launches fuel hauling service.

2008 Schneider National becomes most energy-efficient fleet in the industry when it reduces its fleet of 10,600 company drivers to 60 mph.

2008 United States Environmental Protection Agency recognizes Schneider Logistics as a SmartWay Transport Partner

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Products and Services

Schneider Electric Hyderanad Plant operations are into assembling of the following products:

Low Voltage Products : Masterpact Air Circuit BreakersMedium Voltage Products : Ring Master Units (RN2C, and RM6)Industrial Controls : Tesys and Activa, Harmony range of products, pilot lamps, push buttons, and KIWI2 contactors

As a global specialist in energy management & with an integrated portfolio of innovative products you can look forward to us to make our energy : Safe Productive Reliable Efficient Green In 2009 they would work more closely than ever, with OEMs, Channel Partners, End Users & Consultants and reveal exciting strategies & business plans to jointly help our Customer to “make the most their Energy”. As always, this issue provides us a glimpse of their r expertise in the wide ranging application of their customer. The newspaper front page photograph few days back of Antarctica’s dwindling Ice line frightening and we are all responsible for the same! So, let’s partner to create “A World where we can achieve more while using less of our common Planet.” We are delighted to help you to make the most of your Energy.

2009 is still full of business opportunities and this is always during the difficult period that we see the stronger companies.

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Chapter 4


Since organisation exist to achieve goals, the degree of success that individual

employees have in reaching their individuals goals is important in determining

organizational effectiveness. The assessment of how successful employees have

been at meeting their individual goals, therefore, becomes a critical part of HRM.

This leads us to the topic of performance appraisal.


There are basically three purposes to which performance appraisal can be put.

First, it can be used as a basis for reward allocations. Decisions as to who

gets salary jncreases, promotions, and other rewards are determined by their

performance evaluation.

Second, these appraisals can be used for identifying areas where

development efforts are needed. Management needs to spot those individuals

who have specific skill or knowledge deficiencies. The performance

appraisals is a major tool for identifying these deficiencies.

Finally the performance appraisal can be used as a criterion against which

selection devices and development programs are validated. It is one thing to

say, for example, that our selection process is successful in differentiating

satisfactory performers from unsatisfactory performers.

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Established performance standard

Communicate performance expectations to employee

Measure actual performance

Compare actual performance with standards

Discuss the appraisal with the employees.

If necessary, initiate the corrective action

The appraisal process begins with the establishment of performance standards.

These should have evolved out of job analysis and the job description discussed

under human resource planning. These performance standards should also be clear

and objective enough to be understood and measured. Too often, these standards are

articulated in some such phrase as "a full day's work" or "a good job".

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Communication only takes place when the transference has taken place and has been

received and understood by the subordinate. Therefore feedback is necessary from

the subordinate to the manager. Satisfactory feedback censures that the information

communicated by the manager has been received and understood in the way it was


The third step in the appraisal in the measurement of performance. To determine

what actual performance. To determine what actual performance is, it is necessary to

acquire information about it. We should be concerned with how we measure and

what we measure.

What we measure is probably more critical to the evaluation process than how we

measure, since the selection of the wrong criteria can result in serious dysfunctional

consequences. And what we measure determines, to a great extent, what people in

the organization will attempt to excel at.

One of the most challenging tasks facing managers is to present an . accurate

appraisal to the subordinate and then have the subordinate accept the appraisal in a

constructive manner. Appraising performance touches on one of the most

emotionally charged activities the assessment of another individual's contribution

and ability. The impression that subordinates receive about their assessment has a

strong impact on their self-esteem and, very important, on their subsequent


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The final step in the appraisal is the initiation of corrective action when necessary.

Corrective action can, be of two types. One is immediate and deals predominantly

with symptoms. The other is basic and delves into causes. Immediate corrective

action often described as "putting out fires," whereas basic corrective action gets to

the source of deviation and seeks to adjust the difference permanently.

Immediate action corrects something right now and gets things back on track.

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Chapter 5



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Chapter 5


In Schneider Electric India Pvt Limited they have the system of performance

appraisal of their employees. The main objective of this performance appraisal

system is to evaluate the performance, promote their employees and to arrange for

their various training programmes if they require for enhancing their skills in their

respective areas and in contribution enhancement..

Employees are evaluated by how well they accomplish a specific set of objectives

that have been determined to be critical in the successful completion of their job.

This approach is frequently referred to as. Management by objectives.

Management by objectives is a process that converts organizational objectives into

individual objectives. It can be thought of as consisting of four steps: goal setting,

action planning, self- control, and periodic reviews. In goal setting, the

organization's overall objectives are used as guidelines from which departmental

and individual objectives are set. In action planning, the means are determined for

achieving the ends established in goal setting. That is, realistic plans are developed

to attain the objectives. Self-control refers to the systematic monitoring and

measuring of performance. Finally, with periodic progress reviews, corrective

action is initiated when behavior deviates from the standards established in the

goal-setting phase. Schneider Electric uses very constructive performance appraisal

Process while evaluating its employees. Its evaluation is based on quantitative and

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objective wise.

Company set goals to its employee by properly reporting with its employees and

then evaluating them up to what extent it has been achieved and if there is failure in

reaching the target what are the causes or reasons behind it.

Every evaluator has his or her own value system which acts as a standard against

which appraisals are made. Relative to the true or actual performance an individual

exhibits, some evaluator~ mark high and others low. The former is referred to as

positive leniency error and the latter as negative leniency error. When evaluators are

positively lenient in their appraisal, an individual's performance becomes over-

stated; that is, rated higher than it actually should. Similarly, a negative leniency

error understates performance, giving the individual a lower appraisal. As such there

is no scope of error as far as the Schneider electric company is concerned, but

sometimes over estimation of target brings about a description in the evaluating


Thus, though chances are less, positive leniency errors have been stated to be